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April 30, 2020 at 01:46 PM
A New York-based investment advisory firm agreed to pay $503,228 to settle charges that it misled investors about the performance of its Semper MBS Total Return Fund (SEMMX), a registered open-end investment company, and caused the overvaluation of certain of the fund’s securities, the Securities and Exchange Commission said Tuesday.
RIA Semper Capital Management didn’t immediately respond to a request for comment Wednesday, one day after the SEC issued an order saying the firm submitted an offer of settlement in the case.
Without admitting or denying the findings in the SEC’s order, Semper agreed to a cease-and-desist order, a censure and to pay disgorgement of fees totaling $103,228, plus interest of $25,000 and a $375,000 penalty, the SEC said.
Semper caused the overvaluation of smaller-sized bond positions known as “odd lots” bought by SEMMX, from the fund’s launch in July 2013 until May 2014, the SEC claimed. That “overvaluation of odd lot positions was responsible for a substantial portion of SEMMX’s performance during this period and resulted in the overstating of SEMMX’s net asset value,” according to the SEC.
